The amount of bank loans defaulted by Kenyans has crossed the half a trillion shillings for the first time in history.

This has been demonstrated by data from the Central Bank of Kenya.

The data shows that the amount of defaulted loans jumped by Sh. 30.6 billion to hit Sh. 514.4 billion in the month of June 2022.

This is as the the share of non-performing loans hit a new high of 14.7 per cent in June. This was a higher ratio than the 14.55 per cent that was recorded in March 2021 during the height of the pandemic.

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This historic high comes as the cost of living hit a 62-month high of 8.3 per cent in the month of July.

According to the CBK, the increase in defaults is due to a few large borrowers with specific challenges in their respective businesses.

KCB chief executive officer Paul Russo singled out the construction sector as one of the main industries that have spiked non performing loans.

“The sectors that have pushed up the NPLs is construction—especially in infrastructure like roads— hospitality and manufacturing,” said Russo.

The struggle with debt is reflected in the number of auctions that have been taking place in the country.

In May, the auctioneers booked at least 30 pages on four days alone, to advertise more than 400 residential properties, which increased to over 500 residential properties in June, then about 400 in July.

Over 80 per cent of the properties being auctioned are within the Nairobi Metropolitan area.